Conflict waiver granted to IDA attorney on Park Point PILOT
By Roberto LoBianco
A $56 million, 732-bed housing complex would fulfill what SUNY New Paltz college administrators have identified as a “critical need:" housing for commuter and transfer students. According to the college, New Paltz has one of the lowest rates of housing availability among SUNY schools.
But much of residents’ ire regarding the project has stemmed from Wilmorite applying for a Payment in Lieu of Taxes (PILOT). The company partnered with New Paltz's non-profit foundation to construct the complex.
The Ulster County Industrial Development Agency (IDA), a six-member board appointed by the county legislature, revised its rules in September 2012 to allow dormitory projects, like Wilmorite’s Park Point, to qualify for the PILOT tax exemption program. The changes were made, “to mirror what IDAs are doing state wide,” according to Steve Perfit, the board’s treasurer.
Six months earlier, at the board’s March 14, 2012 meeting, Joseph Scott, the IDA’s attorney, requested a “Waiver of Conflict of Interest” in order to continue to act as counsel in the IDA’s future dealings with Wilmorite.
In its PILOT application, Wilmorite is proposing to pay $5.2 million to the town, school district and county over a period of 25 years. That amounts to a savings of about $32 million over what if would owe if fully taxed.
In a phone interview, Scott said that he requested the waiver because there was “informal discussion” that “a potential project in New Paltz was going to approach the IDA.”
“We now know, through some of the due diligence that he has done on behalf of the lender, that the IDA may be involved on the straight-lease side of the transaction,” said O’Halloran, according to meeting minutes, referring to a partner at Scott’s law firm, Hodgson Russ LLP.
Hodgson Russ, which represents over 20 IDA boards in New York State, was "looking at representing the lender” that might help Wilmorite finance the construction of Park Point, according to then board chair person David O'Halloran.
“There is a technical business conflict in that situation,” said O’Halloran.
Scott said that because “both the bank and the IDA are adverse to the [Wilmorite]” he was confident that the waiver should have been granted.
“The financing is wholly separate and distinct from the IDA transaction,” said Scott.
The board voted to grant the waiver on March 14, but Perfit voted against it. “In [my] business, even if there is a perceived conflict by the individual, [it’s my] opinion that they should step aside,” said Perfit, according to the board’s meeting minutes.
In a phone interview Perfit said he no longer believes there’s a conflict in having Scott represent the IDA on Wilmorite’s application.
“It’s a very large law firm and after Joe explained to me that they were dealing with the Buffalo office, I was alright with it,” said Perfit.
Scott, who works out of the Hodgson Russ office in Albany, said the firm has over 200 attorneys.
“Whenever there's at a minimum an appearance of a conflict, I always review these with my client early rather than later,” said Scott.
The IDA formally received Wilmorite’s application at its Feb. 13, 2013 meeting: “Today Wilmorite is on the schedule for a presentation. For the first time, these members, members of the IDA board will hear about a project called Park Point,” said O’Halloran.
The board's next meeting is scheduled for Dec. 11 at 8 a.m. in Kingston and the Park Point PILOT is on the agenda.
Ulster County Industrial Development Agency - March 14, 2012 minutes by NewPaltzCurrent
